Question

There are over 100 companies that manufacture natural and artificial flavorings used to enhance the taste of food before it is sold to consumers. many of these manufacturers are regional operations and differentiate themselves from the competition by specializing in one or two types of foods for which they provide flavorings. some use their distribution strategies as a means of differentiating themselves from their competition. this industry is most likely an example of:

Answer 1

Answer:

The answer is monopolistic competition.

Explanation:

Monopolistic competition refers to a market type where there are several producers who sell the same type of products, but differentiated from one another; thus making their products unable to be substituted for one another. This is the case in the scenario at the question; though there are multiple companies producing natural and artificial flavorings, due to the different in how they taste, each company’s product cannot be substituted with one another’s.

Answer 2

Answer:

The answer is Monopolistic Combination.

Explanation:

Monopolistic Competition is simply called the Imperfect Competition Products sold by these companies are different from each other. The products are not the perfect substitutes. These companies produce almost same products but with differentiated qualities.

Now in this example, 100 companies are manufacturing natural and artificial flavorings. These companies differentiated themselves by specializing in one or two types of foods for which they provide flavorings. So the product is same, but the specialization is different.